If you’re a regular podcast listener, you’ll know that I’ve been involved with something called the 5 Minute Pitch. It’s a show where we offer up and coming ecommerce entrepreneurs the opportunity to grow their businesses. This season, we had 32 people make their pitches to us for the chance to win $50,000.
Going into the second round, we’ve whittled down the contestants to 17. You can watch the final three pitches from Round 1, as well as the deliberation episode on YouTube.
Today, I’ll be talking to someone who made the cut. Dawn LaFontaine owns and runs Cat in the Box, a company that sells stylish cardboard boxes for cats. She was featured on the very first episode of 5 Minute Pitch and got a “yes” from all 5 judges.
Dawn left quite an impression on me with her presentation. She has such an infectious personality and a good business story that I thought it would be great to share that with our listeners through an Under the Hood episode.
In this episode, she and I discuss some strategies she could use to drive and convert traffic. These include:
- Getting into interruption marketing by targeting Facebook groups that are cat owners
- Looking at the subset of those cat owners who are homeowners
Full Audio Transcript
Intro: This is Mike and welcome to episode number 244 of the EcomCrew Podcast and hello from Hong Kong, recording this introduction in Hong Kong. I recorded the episode with Dawn a few days before this and wanted to get this out before 5 Minute Pitch is over, and it seems like 5 Minute Pitches have been rolling along. As of recording this introduction, we’ve actually gone through all 32 contestants. And now we’re into the deliberation round, which I just watched that episode and it’s awesome.
I think it’s actually my favorite piece of content, just fun watching us go back and forth and banter about the people making it through. So, definitely, exciting time for the contestants who have moved forward, I think it’s just been a lot of fun. So if you haven’t heard about 5 Minute Pitch, if you’re new to the EcomCrew Podcast, head over to 5MinutePitch.com or go over to YouTube to find 5 Minute Pitch. It’s a collaboration that I did with Steve Chou from My Wife Quit Her Job, Greg Mercer from Jungle Scout and Scott Volker from The Amazing Seller. And we also had a weekly guest judge.
And the idea was to take 32 contestants and eventually whittle them down to one winner who’s going to win a $50,000 Grand Prize. There’s no strings attached. It’s not an investment or anything from us. And we’re also, in addition to the $50,000, going to be doing some mentorship with the winner, which I’m excited to do when that time comes. So go check out 5 Minute Pitch. The contestant today who is on the show was actually our very first interview which set the tone for the whole thing.
And it set it in a great way because Dawn from the Cat is in the Box is just an awesome person. She has a great idea, unique products, and just put us all in a great mood. She is just infectious. You’ll understand what I’m saying as soon as she says hello here on this podcast. And with that said, it’s probably time let’s just go ahead and start the episode. So I hope you guys enjoy this interview with Dawn from the Cat is in the Box. And if you haven’t checked out 5 Minute Pitch yet, do so, I think you’ll enjoy it. All right, let’s get into the interview.
Mike: Hey Dawn, welcome to the EcomCrew Podcast.
Dawn: Oh, hi Mike, thank you so much for having me. I’m absolutely thrilled to be here.
Mike: The pleasure is all mine. Talking to you is like kind of reminiscing of 5 Minute Pitch because we met through 5 Minute Pitch. I think that if I remember correctly, you were like our very first guest. So you really helped set the tone for the whole show. It was an awesome experience; you have an awesome product, which we’ll get into. And you’re just like fun to be around and talk to; you just always have a big smile on your face. I’m excited to do this interview. It’s definitely awesome having you on the show.
Before we get into it, let me just tell people what 5 Minute Pitch even is if people are new to the podcast, Steve Chou from My Wife Quit Her Job, Greg Mercer from Jungle Scout and Scott Volker from The Amazing Seller and myself along with a guest judge each week did this thing called 5 Minute Pitch. And the idea was to have 32 contestants that would go through the first round of getting either a pass or fail. And then they go into this next round of do they make it into the finals or not.
And then the finals are going to be live in Miami and we’re recording this before the finals. So we don’t know who’s going to win yet. But the winner will get $50,000 live on stage. And it’s a pretty exciting project, you can go to 5MinutePitch.com to check that out and learn more about it. But I’m curious as an insider or someone on the other side of it; I guess maybe it’s more appropriate, Dawn, what did you think of the experience?
Dawn: Well, I got to tell you going into it, I was as nervous as can be, as you can imagine. But I promised myself when I started my business that I would do anything possible to achieve success. And if that took going out of my comfort zone to participate, then I was willing to do that just to get in front of a panel of you folks who know everything that I need to know was so exciting for me. So, a little unsettling but absolutely thrilling.
Mike: Cool. And you made it through the first round. We haven’t done the second round as of recording this but you already know kind of what happened with that. But we won’t talk too much about that. But we do encourage people to go over to 5MinutePitch.com and check that out and see Dawn’s pitch on her company which is Cat in a Box which you sent samples; you’re one of the few people. It’s interesting to me, of the 32 people that were on the show how few had the wherewithal or thought through to send some samples of this so the judges can see it.
I think maybe about a quarter of the contestants, maybe a third which is a lot lower number than I would think, but you sent samples. We got to see them which really helps formulate questions and also get some advice that we had for you while we were there. We’re going to go through a bunch of other advice that we have possibly on this podcast. But yeah, maybe just tell the audience a little bit about your company and where they can find you if they’re interested in buying one of your products.
Dawn: Well, first and foremost, they can find me at Thecatisinthebox.com. That’s my personal web store. And my company makes whimsical cardboard boxes for cats who think inside the box. So if you own a cat, and you know a little bit about cats’ obsession with cardboard boxes, then you’ll understand why I designed the product the way I did. So the cats can have some place to play in and human beings their owners can have a beautiful, attractive clean box for them to play within their house.
Mike: Yeah, and like I said, you sent some samples; you’re selling yourself a little bit short, because it isn’t just a box. I mean, you put some beautiful artwork on it. And it’s just clever. I mean, like the two that you had sent was I know there was a like a block of cheese basically. The other one I’m trying to remember was it like a milk carton or something?
Mike: Okay, it’s been six months. So it obviously left an impression on me. I can barely remember what the heck I did yesterday. So the fact that I remember that is a good sign for you and I don’t even have cats. So yeah, I mean, I thought that it was just — it’s really clever. And like I said, instead of just having Amazon boxes or whatever laying on the house that are just not very sitely, this is kind of like a prop as well and a conversation piece in a lot of ways and I thought it was a brilliant idea which is why you got a yes from me.
Dawn: Oh thank you.
Mike: But yeah, I mean, it’s — I see some challenges. I think that every business has challenges but I see things through a different lens after running five different or six different e-commerce businesses over the years. And so the first thing I’m always thinking about is the challenges it seems like. But I think that the things you have going for you way outweigh that. So Thecatisinthebox.com if you have a cat, or you know someone that has a cat, that might be a good present, go check that out over at Dawn’s websites, definitely pretty cool. So yeah, let’s chat about some other things moving forward here. We kind of we’re going to do like a modified Under the Hood segment.
For those of you again, who don’t listen to the EcomCrew Podcast, I’ll explain this as well. But basically, normally what we do is we interview podcast listeners, get to know about their business, and then let them ask questions. I encourage you to go watch the 5 Minute Pitch episode about Dawn’s business if you want to know more about business. But I want to take some time Dawn to maybe ask some questions that I can help answer that will hopefully help you in your business moving forward. I try to do this because I think that the reality is, is that a lot of business owners are going through the same things that are often not talked about.
And that’s one of the things I try to be unique about on EcomCrew Podcast is talk about the challenging things or the things that people are often thinking about but never bring up because it’s like how are you doing? It’s just, oh, I did X million dollars in top line revenue last year and everything is great. But the reality is that net profit is the number that matters, and there’s always — businesses don’t ever go on a straight line up, there’s always zig zags up and down.
And a lot of times people are also experiencing down things and things that aren’t as great, so to try and give an opportunity to turn the tables and ask some questions of me that you’re struggling with. And we have a few things here that Abby pulled out in the pre interview, which is awesome. But yeah, let’s dig into some of those and maybe ask questions, and we’ll do our best to help out here.
Q: Well, obviously, the burning question for someone at this stage of business that I’m in is, how do you drive traffic and specifically about marketing because there are so many venues, social media and otherwise, competing for my very limited marketing dollars, and I’m more paralyzed and unable to determine myself what the best way to go is? So that’s my first question obviously.
Mike: Got you. Okay. So here’s the thing, every business is a little bit different; you have to pick a unique approach. You can’t take what we’ve done with ColorIt or with WildBaby and sprinkle that exact same pixie dust on any other business and be successful. And so the things I see for let’s talk about a few attributes of Cat in the Box, and things are going to be important we have this little talk here. First and foremost, this is not something people are searching for, right? So you got to put yourself in that mindset.
So this is not going to be something that you’re going to do well with on Google Shopping, or necessarily with doing content where people are searching and finding you that way through your blog content, or finding it on Amazon because people are not searching boxes for cats. It just — that isn’t really a search. This is something that people that are cat owners know that if they throw a box on the floor, the cats are going to want to play with it and sleep in it or whatever. But because you’ve kind of made a new category, they aren’t out there looking for that product to solve the problem.
So with that in mind, you’re going to need to do some sort of what’s called like interruption marketing, which means that they’re your potential customers, but you’re catching them doing something else, and you’re interrupting what they’re doing to convince them that they should go buy your product. And so I mean, I guess I’ll just take a break. Does that all sounds fair and accurate?
Dawn: I think that’s absolutely true. And I will tell you that I did try Google Shopping for about four weeks. I mean, it was just panic on my part, I saw $150 disappear in the blink of an eye, and did not get any sales that seemed to be directly related to that. So I agree with you completely that whoever clicked on my Google ad was not looking for that.
Mike: Yeah, I mean, that’s definitely going to be your challenge. But it also can be your advantage because you have something that is new and unique and you don’t really need to explain it. That’s another big key because if it’s something that you have to spend a minute explaining, it becomes too complicated to sell on the internet. So your thing is pretty much visual with you can see it and get it and you’re done. So you don’t need to climb that hurdle.
So the ways that I would go about doing this would be you’re lucky in terms of Facebook advertising land. You can do this relatively cheaply and there are interest groups on Facebook of cat owners. So you can target people specifically that own a cat like right now. And that’s really impactful, because now you’re not advertising to people to the 90%, or 80%, or whatever, people that don’t own a cat, because it’s still a relatively small portion of the US that owns a cat. And you might be able to also layer things on top of that. And I don’t know exactly what those things are; you’re going to know better than I will.
But there’s probably other elements besides the fact that they own a cat, there’s going to be a subset of people in your market that have some other attributes that also makes them more likely to buy your product and a whole bunch of possibilities. I’m just shooting from the hip here because I don’t know this market, I’m not a cat person myself, I will fully disclose this. I am a dog guy. This is almost as bad as like having a republican versus democrat conversation right now.
Dawn: No, I got two dogs.
Mike: Okay, so you’re the guy or the girl that does both but for me I’m the dog lover and not the not the cat lover. But as a cat lover, you’re going to understand that way better than I do that maybe it’s people that own a cat and they own a home, or maybe they own a cat and they watch Oprah or they own a cat and they’re into some particular designer, whatever that is that you know that I don’t know, my first Facebook ads would be people that have an interest in cat that own cats, people that own cats, and they have an interest in Oprah, or whatever that other thing is.
And then the ad has to be whimsical and eye catching in some way that stops them in their tracks. And I don’t know how much you use Facebook or other social media. But whatever you’re doing online, no one ever is thinking to themselves, I cannot wait to see an ad. It’s always get this ad away from me as quick as possible. I’m trying to get what I’m trying to do right now and just leave me the hell alone. But at the same time, we have made a multimillion dollar business out of nothing but Facebook ads and other types of online advertising.
So the point is that they work if you can trigger the right emotions and the right people. So again, cat owners that have this other attribute or maybe a couple of other attributes with an ad that makes them stop scrolling. In the first three seconds of your ad, first five seconds of your ad, it has to do something where they let their thumb rest for a second and stop scrolling up the screen to watch your ad because it’s making them smile or tugging at their heartstrings or whatever it might be. And you have that product, so I think that you have the opportunity to come up with that add to that that right group of people that your biggest problem becomes not getting traffic, but keeping the stuff in stock if done properly.
And I think that again, it’s going to take you like — even if it was me doing it with all the background I’ve had, I’ve spent a million dollars on Facebook ads. So even with that background, I wouldn’t get it right on the first try. But it would take a lot for me to stop trying because I feel pretty strongly that there’s some combination of audience and creative that would make this go crazy. And again, it’s got to be the type of ad where it’s whimsical and funny, and it gets people to stop and they just they want to watch the rest of the ad and then they want to buy the product.
And the other thing you have going for you is your product is in that spontaneous purchase dollar range right? It’s not $100 product, it’s not $1,000 product, it’s a $25 product if I remember correctly with shipping in that range, I forgot the exact price, forgive me. But it’s the kind of money that people will be like, oh screw it, I’m going to buy one of these, like I just you got me, I’m buying this and they don’t think much about it, right. If it’s much bigger purchase than that it becomes more difficult.
So I think that combination of things can work really well for you. It’s just a matter of taking some of the creatives you already have, because I’ve seen some of your video creatives and putting them together in a way that tells a good story. You can you could do the voiceover yourself, even try to bootstrap it so it’s not costing a bunch of money. And then start testing these Facebook audiences with $20 at a time and seeing what happens, send traffic to your website, and see what happens. But I do think that that combination does exist for you.
Dawn: That’s actually really incredible advice. I told you I was a little gun shy after the whole, it was only $150 on Google Shopping. But I thought oh, I just I don’t know how to do this. And this is a big black hole that you could be throwing money into. But that’s actually tremendous advice that I’m actually going to take and run with.
Mike: And I mean, I’ve talked a lot about this lately, I say a few different things. First of all, don’t compare your first step with someone else’s hundredth. And e-commerce is a math problem that even at scale never changes. So for you $150 is a tremendous amount of money, and it’s scary. And what will happen is over time, you’ll just add a zero to that. Yeah, I’m serious and you add another zero to it and another zero because we’re at a stage where it’s not unreasonable for us to spend six figures a month on advertising. It’s just like totally normal part of the conversation. But if you asked me that five years ago when I was at your stage and just getting started, the thought of spending $150 was incredibly intimidating.
And don’t let those numbers embarrass you or where you think that you’re not significant in the world because you’re not spending large amounts of money or that that’s intimidating. That’s all completely natural. It just again, we have the tendency to compare ourselves to others, especially when you’re coming on something like 5 Minute Pitch and talking to people like us and often forget about the fact that we started the exact same place that you’re at right now. So don’t let that intimidate you.
Dawn: Well, thank you so much for that. Does this relate to conversion — the conversion question? If I’m getting somebody on Facebook, and they’re already interested in clicking on over to my website, are they going to buy? What are the factors that contribute to a higher conversion rate?
Mike: So I mean, you got to be careful with this as well. I mean, conversion rate is definitely important and it can be really important at scale because if you are at a 1% conversion rate, and you can go to 1.1 and you’re at our size 10% more conversions is massive. And it does matter still when you’re smaller, but you got to be careful what you’re focusing all your time on because to get an extra 10th of a percent conversion can often mean spending 10,000, or more dollars on programming and design for your website.
And so you got to be able to put things in perspective of like, okay, I’m about to spend $10,000 to improve my conversion rate. In order to make that $10 dollars back, I got to sell $100,000 worth of product, because most of us are operating at 10% net margin, let’s say or maybe it’s $50,000 in product if you’re at 20% net margin. So I mean, you’re at the size, where you’re just selling $50,000 worth of goods period is kind of what you’re trying to get to. And so you got to be careful about focusing on that too much, because you’re putting the chicken before the egg a little bit.
I mean, you want to make sure that your website looks as good as you can get it based on your talents, or maybe some couple of hundred dollars with the effort from somebody on FreeUp, which I recommend F-R-E-Eup.com or maybe Upwork or some of these other platforms where you can hire a programmer or a designer to kind of help with some things if you’re not technical. But just keep things in check and keep things to where the math works for you. And as you get bigger, you can focus on that.
The three big pillars or factors of why people make a decision to buy or not to buy in e-commerce are free shipping. So if you’re charging shipping, people really get turned off by that. So we encourage you to have a free shipping level or in your case, you probably just need to offer free shipping on all the products and build that into the price. So I mean, there’s a lot of studies. If you’re selling something for 24.99 with $5 shipping, your conversion rate will be way lower than if you just sell it for 29.99. People flip the hell out about paying for shipping.
Mike: Yeah, it just, it turns people off, they’re like I’m not paying for shipping because the people still have this brick and mortar mindset in their head. And they don’t realize that they’re paying for some convenience and not have to go to the store. So that’s usually the number one factor in almost every study online. So in your case, I think because of the dynamics of your business, you probably just need to offer free shipping period.
For other businesses like ours, we’ve used free shipping as a mechanism to increase our average order value. So we put free shipping on ColorIt at 29.99, on Ice Wraps it’s like $50, every one of our sites has some free shipping threshold, trying to encourage people to spend more than they were planning on just to get the free shipping because people love getting a deal and they want free shipping. So that’s pillar number one.
Number two is trust. People trust Amazon because it’s Amazon, so they don’t think about are they going to scam me or they’re going to steal my credit card or they’re going to actually ship the item? What happens if it’s broken? All these different things that people have that are what else, so trust is a huge thing. So doing your best to communicate that you’re a trustworthy website is still important. Even in 2019, people are still very skeptical about buying things online. So you got to do your best on your website to cover that and make sure that people feel that you’re a trustworthy company to buy from.
There’s things you can do to help with this, you make sure that your policies are clearly there, you make sure that you tell people that you’re a secure website, and if you have a phone number that your customer support is easily accessible, and that you make that prominent on your website. These are all things that help people feel like you’re trustworthy. So that’s pillar number two.
And then the third one is Returns. People again, they are always concern that if they get the item and they don’t like it, how much of a pain in the rear end is it going to be to return it? This is again, where Amazon excels. There’s no questions asked, you just click a button, you got a return label, you send it back in, your return is complete. And so making sure that that that’s communicated properly, especially with a product where people might get it and just realize it’s not for them for some reason, it’s going to be a small percentage of people.
But you want to make sure that you don’t stop the larger percentage of people that are going to keep the product if you can just get it in their hands because your return policy isn’t on your website or its onerous to even get the thing back and make them jump through a bunch of hoops or pay double for shipping or whatever. You just want to make sure that that’s covered on your website. So if you can cover those three things, and not spend a lot of money redoing your website to communicate that, that’s probably the most important stuff to deal with in terms of conversion rate.
Dawn: Is it okay to expect the customer to pay to ship it back if there was free shipping on the way there, or is it just a no questions asked like Amazon, keep the item, we’ll refund your money?
Mike: Yeah, so for ColorIt — I mean every business we have is a little bit different, IceWraps we have to do it a little different because it’s a health product. And if they touch it, we can’t take it back or we can’t resell it. So it’s a little bit different. And again, the math of your business makes a little bit of a subtlety here in your return policy because we have a high lifetime value of a customer with ColorIt; we know we’re going to get lots of repeat purchases. So we can absorb a little bit more on the return side of the house unlike something like IceWraps or maybe like Cat in the Box, because you’re probably not going to sell them a whole bunch more of those in the future.
So I would go with a return policy that basically is you can return it within 30 days no matter what, whether your cat peed in it or chewed on it or whatever, it doesn’t matter. I’ll take it back any reasons, no questions asked within 30 days, but you got to pay it to get it back to us.
Dawn: Okay, that’s good advice.
Mike: Yeah, and I think that by saying you’ll take it back no matter what, that triggers people’s thought process of okay, like they’ll take it back. And people don’t realize like how much shipping is so they don’t realize it’s going to probably end up costing them like 10 or $12 to get it back to you until they’re at the post office. And maybe they just say forget it at that point, and they don’t bother you. But what that tells me and the reason that I’m comfortable taking it back under those circumstances is the person really doesn’t like it, if they’re willing to spend eight to $12 to get the thing back to me. I mean, they’re really unhappy. And just the way that I’m built, I don’t want someone’s money that isn’t happy, right. That’s not how I want to make money in life.
So I’ll eat that, I’ll sell 10 more things just to break even for the one thing that someone returned, because it is costly to deal with. But I’d rather do that than be the person that’s screwing people to make money basically. Someone out there in the world thinks that my company is like one of these evil empire companies that are out there that most people, that’s how they think of companies. I just don’t want to be that. So that’s how I’ve kind of drawn the line. And then, in terms of like if something gets damaged in shipping or it’s defective, then we just replace it, no questions asked.
Dawn: Oh, that that has happened in this. I mean, as a consumer myself, I know how I like to be treated, so obviously that’s how I’m going to treat my customers.
Mike: Yeah, I think that’s just a good way to live life in general right? And so that’s my recommendations for that.
Dawn: Thank you. That’s extremely helpful. I have to think about applying those three pillars to my website and to my business.
Dawn: I actually had a couple of other questions that were about you. I don’t know if that’s impertinent, inappropriate, but I forwarded them to Abby first just to make sure. Is that all right?
Mike: Yeah, I’m an open book.
Dawn: I’m a big fan of your podcast so I’ve listened to quite a few. And maybe I’m just inferring here. But you do seem like the kind of guy who not only can live a simple or austere lifestyle, but actually enjoys life in an RV with just a few boxes in the back. So I was kind of wondering, what motivates you to continually strive to earn more money that maybe you’re not even that interested in spending?
Mike: Yeah, I mean, this is something that I’ve been thinking a lot about lately over the last couple of years, especially, it’s funny that you asked that. I can tell you, I know it always sounds like BS because the people — you hear all the time, it’s not about the money and for most people it is. So it just sounds like such BS, but it truly is not about the money. I mean, I really have everything that I need. I mean, I still like making money just because it’s — I think it’s a couple of things.
Number one, it’s like what I’m used to, so it’s like you always go back to your comfort zone and I’m just good at that. I don’t know, everyone’s got their thing. And I’m just good at being an entrepreneur; I’m good at being scrappy, and figuring out ways to make money. And I’ve been like that my whole life. I mean, it’s never been a challenge. I’ve never felt like I’m going to be broke and destitute. So, a lot of the things I’ve been thinking about lately, and what I’ve been doing, like the last couple years shifting towards is just making sure that the way that I’m making money that I’m doing in a way that’s like helping others as well, and especially EcomCrew has been that thing where, it’s allowed me to go talk to people like you.
This conversation right here is a perfect example where it’s just, I certainly don’t need to do this; I’m not making any money from doing this. It does have a halo effect of all the things that we do with EcomCrew but for me, this is the enjoyable stuff. I love talking about this stuff. And it’s no longer as interesting or as fruitful for me to make another $100,000 because I’ve already kind of been there. And it’s going to make very little difference in our lives moving forward because we are minimalist. I really have — everyone kind of figures these things out at different times in their life.
I don’t preach this or try to tell other people how to live their lives, and certainly not anything like this. But what I’ve realized by luck, in a lot of ways or just indirectly by a series of things happening, that having more things and more responsibility actually makes me less happy. And this seems to be trendy these days; this is the thing that a lot of people are talking about. But we’ve been like this since mid-2000s. And the way that it really happened, we were in the online poker business, and we were living abroad, and we only could bring so much stuff with us on the plane, which was two suitcases each. And we lived with that amount of things for four years and realized that all the things that we thought that we needed, we just didn’t need.
And it was actually pretty liberating when you go on vacation or go do things. And a lot of times, you always want to bring stuff back and like buy things and all this, you just don’t need them. And like in the moment, you’re kind of sad for a few seconds that you didn’t buy the thing. But by the next day, you are not even thinking about it anymore. And there’s nothing, you just didn’t need it. And the other thing that you realize as well was you when you buy stuff, you have like this dopamine hit by buying it in the moment but that goes away really quickly. And just like any other addiction or things which I think we’ve all become consumerism lives or whatever, it just becomes a bigger and bigger trap, because you have to continue to do it more and more to get the same effect out of it.
And so for me, it’s just been liberating not having to worry about that stuff. And it makes us free to travel and do things that I think at the end of the day, when you’re old and gray and you looking back at your life, the things that you’re actually going to care about, having 20 gold watches in a drawer, having 12 cars in the driveway are probably not going to be the things that you’re going to look back that are going to make you happy. For me, it’s traveling the world; I’ve been to 49 countries and about to go to my 50th. And I think I would look back at that and be like man that was really awesome.
I saw the whole world and got to interact with different cultures and I spent a good portion of my life giving back to other people and helping them with their businesses and making a difference for them in a way that maybe never would have happened for them if it wasn’t for me and the actions I took. And it’s a little bit philosophical in kind of weird to talk about, but just kind of a point where I’ve gotten to with a lot of this stuff. And I’ll continue to do that for as long as it continues to make me happy and that I get enjoyment out of it. And maybe eventually I won’t, but for right now, this is what I enjoy doing and going to continue doing it.
Dawn: Well, I want to thank you and tell you that you have already had an impact on me. So if you need to hear feedback from others that what you’re doing is working for them, then I want you to know that.
Mike: Thank you. I would be lying if I said that it didn’t matter because when I talk to people like your feedback like that, and thank you for saying that, it is what keeps me going. There are times where just like anybody else struggles with things in life in a business where you wonder if it’s worth it or not and especially when it’s a podcast environment where you’re just talking to yourself behind a computer, and I’m in a room by myself right now. I know that there’s 50,000 people listening, but I can’t see them. So it’s hard to quantify all that.
And so it’s times like this, and also times when I go to conferences, and I see a bunch of people in person, they are able to say things like that, that doesn’t get old for me, it means a lot to me, it keeps me going. And I know that the value of the things that I can do to help impact your business and your life are going to be dramatically, more impact than they will be for my life and that’s pretty darn cool. And it doesn’t hurt me right? It’s like, it actually does the opposite. So thank you for saying that.
Dawn: I had another question that’s, I mean, it’s about your decision making but ultimately, it will inform some of my future decisions. But it also has to do with things that I’ve heard you mention on your previous podcasts. And in one of the podcasts I listened to, you mentioned that you deliberately drive traffic away from your site to your Amazon listings, and you explained that it ultimately leads to not only a better top line, but a better bottom line for you too, you suspect that it does.
But in one of your other podcasts, you mentioned some of the frustrations about your Amazon specifically; I would say the indiscriminate control that they have over your ability to sell, along with a concurrent lack of customer service on their part. So I’m wondering, I mean obviously, you’ve decided that it is that the benefits that you get from business conducted through your own shop, the ability to control your relationships with your customers, etc. are outweighed by the chance to build you a bigger business through Amazon. Is that accurate or?
Mike: Yeah, so I mean, this is one of these questions that’s going to depend on what day you catch me on. I am definitely a little bit bipolar when it comes to this discussion. And I understand that and I’m actually aware of it. So it’s not like you’re catching me off guard, because I know that this is the case. As I mentioned earlier, just like every business is different, right? So for the types of things that we happen to settle into, coloring products and gel packs etc. these types of things, tactical products, we just happen to be this was not necessarily purposely planned, but the things we got into are these somewhat commodity based, incredibly high volume, search based type products.
So if you think about the environment of e-commerce and where things kind of stand right now, e-commerce itself continues to grow. I think it’s like something like 17% of retail transactions and Amazon is like half of that now and maybe even 55%. So you think about people that are — what kind of product are they looking for. All of our stuff is not interruption based products, it’s intention based. They have a problem, they have a shoulder surgery coming up so they’re typing in shoulder ice wrap or they are getting Botox and they’re looking for face ice pack or they have a wisdom tooth and they’re like typing in wisdom tooth ice pack, or they’re looking for gel pens or typing in gel pens or they’re looking for a tactical flashlight and are typing in tactical flashlight.
So if 55% of all searches are starting on Amazon, the amount of traffic that’s there is such a big number that even I still have a hard time getting my head around it, like just the sheer amount of stuff that sells on Amazon every day is just an astronomical number. It really is. It’s crazy. So the math makes it difficult to ignore that no matter how much you want to ignore it, no matter how much better it is to get the sales off Amazon. If you could rank number one for wisdom tooth ice pack, or glitter gel pens, or tactical flashlight, whatever these searches are on Amazon that is worth literally tens of thousands of dollars a month in net profit for realistically very little work.
I mean, call it what it is. I mean, selling on Amazon is as frustrating as all the frustrations are with Amazon. That’s another whole thing. It is an asinine amount of money for relatively little amounts of work. Like all you got to do, your only responsibility in life is to make sure you don’t run on a product at Amazon, and answer the couple of customer service emails that happen and make sure your ads are running basically, and like, you’re done. You can do that for one hour a day, or maybe even one hour a week from a beach in Hawaii. It’s incredibly easy, compared to if you were doing that on your own website, think about the same amount of dollar volume and sales, how much more work it is to facilitate that.
And I’ve been there. So I can tell you firsthand that shipping 1,000 orders a day from your own warehouse and dealing with all the returns and all the customer service issues and everything else that comes into play with that and you’re actually probably making less money at the end of the day doing all that. Again, it’s hard to ignore all of that. So this is why I struggle with the Amazon equation. And for you and you’re probably asking this in your business, it’s a totally different thing because again, people are not searching for cat in a box or cat boxes, or they might be searching for litter boxes, but they’re not searching for cardboard boxes for cats because that’s not really a thing yet on Amazon. So for you, it’s a totally different situation.
And the reason that I struggle with this what I just talked about, because I mean, we have in one of our business, our Ice Wraps business nets mid five figures a month in net profit, and 90% of our sales are on Amazon and it’s actually a pretty easy business to run. It’s a way easier business to run than ColorIt which we just sold and for a lot less work. So every business kind of has a different equation. But I do think and the reality is and I know this I’m prepared for, but I do think the musical chair stops at some point.
And there’ll be a day where we’ll all regret having 100% Amazon based business when that goes away, for whatever reason it goes away. And there’s a whole bunch of reasons how that can happen from Amazon flipping switches to competitors to whatever but for right now, it’s very lucrative. And as long as your business, you’re cognizant of that and not putting yourself, leveraging yourself up too much and getting yourself in a bad situation, I think that for the foreseeable future still many years to come, this is still an amazing opportunity.
Dawn: And when it does happen, you’ve got an RV in the driveway and you could just take off.
Mike: Yeah, I mean, it’s true. And because we live a minimalist lifestyle, and we aren’t striving to just always go buy more things, it doesn’t matter to me. I don’t have the pressure of like, oh my god, now I can’t make my house payment or my car payment. This stuff is all paid for, and I don’t desire to have literally anything else. Like I mean, we just — like I said, we just sold one of our businesses, it was a seven figure deal. And most people would be buying something to celebrate that, I didn’t buy anything. I have no desire to buy anything, it wasn’t like, I had to be patient or constrain myself to make that decision.
It was just like, there’s literally nothing else that I want. I’m happy and content with what I have in life and the things I’m looking for are the things that you just can’t go out and buy. And it just takes a lot of pressure off. And it’s a lot easier to say that. I also realize I’m very fortunate to even be able to be in that position to begin with. It’s not easy to even get there. So that’s another whole story and I am very aware of that. It’s easy to be up on a pedestal or a throne or whatever, and be able to say those things because I was fortunate enough to be able to put myself in that position. So I also am aware of that too.
Dawn: Well, that’s really interesting. And I actually think that there are plenty of people making money who still don’t find the satisfaction that you’ve found in your life.
Mike: Yeah, I mean, I was that guy. I mean, that was — when I first moved to Costa Rica, I mean, we were making really good money, and I just never had enough. And I was, I think, also fortunate that I — again for me, I’m not preaching this is not me, preaching and telling other people that they’re bad for wanting to do that at all. I think that that’s ridiculous. This is just how I’ve chosen to live my life and go about things. But I had this insatiable appetite for wanting more things. I buy a car, I want another car, Ibought a house, I want another house, I bought [inaudible 00:40:26], I would fly in business, I want to fly first. I fly in first; I’d be trying to figure how I can fly private. It was just never enough.
But again, for me it was just the repercussions of that are, you’re constantly having to trade your time for money to make more money to be able to feel that stuff. And I eventually just felt like I’d rather go experience things than stress myself out and always be in a position that I’m one bad economic uncertainty away from also personal financial ruin as well because like it can happen pretty quickly.
Dawn: Is that something that you teach in your Ecom Premium course too?
Mike: I don’t. I have actually been thinking — I don’t think it’s appropriate. It gets more like philosophy, I’ve been thinking about like reviving my personal blog and talking about it there because I think it’s more of a personal thing. And what people choose to do with their profits from e-commerce is up to them. Again, I don’t want to be preachy, and it’s not — I think that people largely have to figure this stuff out for their own. I’ve also realized that myself that if people can tell you whatever the heck they want to tell you, but until you’re willing and able and kind of figure things out on your own, it’s hard to experience things.
I mean, a really basic example was like your parents can tell you don’t put your hand on the stove, it’s hot, it’s going to hurt, don’t put your hand on the stove, it’s hot, it’s going to hurt, but until you put your hand on the stove, and bring yourself and realize, oh my God, I shouldn’t do that, probably most people end up learning from doing it themselves. And for me, there were cycles of I used to just do things a lot differently in aspects of my life until — and I’ll probably feel different in 10 years from how I feel now. I think everything is a learning experience. And that’s not quite the EcomCrew Premium type stuff.
Dawn: Although in our consumer society, I think sometimes people aren’t even aware that a different way of living exists.
Mike: Yeah, I agree. And you compare yourself to others around you. And that’s another challenging thing, because it’s people in your own social circles, you’re comparing that stuff and you want to seem like you’re important or show off in some way. It’s just again natural human tendencies. Again that’s why I think that — because it’s all natural human tendency. So it’s like it’s wrong to tell people that they’re bad people or something because they’re doing something along those lines. So it’s just very natural. But at some point, some people like myself just feel like they’ve had enough. And that’s kind of like where I’ve kind of gone to.
Dawn: That’s really interesting coming from somebody who’s accomplished all you’ve accomplished in business. So it’s great to hear too.
Mike: Yeah I mean, the thing I struggle with still is that still the business part is like what really brings me enjoyment. And I’m sort of I struggle with that now is like, is that what I really — am I just going back to a comfort zone? Is it really what I want to do? I could do anything but I still love doing this. And I feel like for me, I’d rather — that’s why I try to turn this into something I can actually also help people. I think it’s better than just donating money to a charity. I think that by doing this, it’s a more effective form of philanthropy in some respects.
Dawn: And that’s highly leveraged, you have far more of an impact on individuals.
Mike: Yeah. That’s kind of the thought process. So yeah, I don’t know. I mean, again, we’ll see what happens.
Dawn: I think you answered the question.
Mike: It’s interesting. But yeah, thank you for asking. It’s an interesting question. No one really ever asked those things. I talk about them on and off on the podcast.
Dawn: I never heard somebody who you were interviewing ask you, so here’s my chance.
Mike: Perfect yeah. So any other things I can do to help you rather than just getting the philosophical stuff?
Dawn: You helped me actually; they help me know how to think about business. And because you’re not just looking at what you got to do today, but you’re looking all the way down the road too. So that actually really, really helped me too. I’m sure I had 10,000 other minutia type questions to ask that I won’t bore your audience with but I thank you so much for this.
Mike: I tell you what, we have a few minutes left, because we’re running a little bit early on this episode, I have one other thing that you didn’t bring up that I want to give you some advice on?
Dawn: Oh, thank you.
Mike: So you were asking about driving traffic and marketing. And one of the other things I think that you can do there, so again, it’s that interruption based thing where people are somewhere and they’re seeing something that either you’re putting out or someone else is putting out that kind of stops and makes them think, I have to have one of these. And so in addition to the Facebook advertising component to that, I think that the influencer advertising can be really powerful for you. And the way that we’ve done that is we’ve stopped using something like Famebit, which is just a platform where you can hook up with other YouTube advertisers. And we’ve started doing a grassroots type approach to it where we individually reach out to people that were interested in promoting our products.
So I would imagine that there are tons of “crazy cat lady” type YouTube channels out there of people that are just super passionate about their cats that have a lot of cats, are always talking about their cats and products for their cats. I would just — I don’t know this for a fact, because I haven’t searched for this but I would just imagine that that is a big community within YouTube. I would reach out to those people on a one by one basis and try to get your product in their hand for free.
And it’s a very arduous low acceptance rate endeavor, because you get very few people that will respond to you and then you got to like, work out some terms with them. But ultimately, the people that end up taking the product and reviewing and talking about it are people that have actual interest in cats and in your product. And they’re going to end up talking about it because they truly like your product. And it’s not about the money for them. It’s about the content that they’re creating for their channel and the fact that they personally like your product. And now you’re in front of an audience of people that are your audience, right?
The people that are watching that channel almost certainly are in the cats themselves; otherwise, they wouldn’t be watching the cat lady videos. And I think that that’s another really good opportunity for you. And it’s one of those things you can start right now. It’s cheap to do. You only send product to people who say yes. The perceived value of the product that you’re selling them is much higher than your actual cost. And it’s one of these needle in a haystack type things, but you create your own luck. And over time, you basically make it almost 100% certainty that you’re going to be on a channel that’s like really good for you, and that can really help blow up your business. So that would be another thing that I would look at it as well.
Dawn: I hadn’t thought of YouTube, which the videos themselves have more longevity. I have done that on Instagram. But the big Instagram, the big cat accounts often post multiple times a day, so if I did provide my box to them and they would post a photo, or a video, but it’s quickly replaced. But since also they’re posting later in the day, and it really doesn’t have any longevity on Instagram, I had not actually considered YouTube, that’s really superb advice.
Mike: Yeah. I mean, you’re dead on with the Instagram problem, because it’s within 24, really, within 48 hours, for sure, it’s like just gone. But the YouTube stuff will live on. And it’ll live on in that video of things that people are searching for basically indefinitely, like how to take care of my cat, or how to calm my cat down or whatever that video is called, whatever the search terms are that you’re going to rank for there. And then your product is placed in that video. That’s really valuable to you.
And it’s also going to be in front of like let’s say it’s someone who has 100,000 subscribers, I would imagine that 85,000 of them or more probably are a cat person themselves that currently own a cat. And all of a sudden, like oh my god, like that’s a really brilliant freaking product, I have to have one. And you just get a bunch of sales in the moment as well because you’re in front of people who are going to never be watching those videos that are your customer. And I think that’s a really good opportunity for you. And it’s one of these like again, it’s a grassroots type thing that you can do on a very tight budget, which is why I really like it for you.
Dawn: What a great idea. Thank you so much for that.
Mike: So that’s one more knowledge bomb before signing off.
Dawn: And I’m open ears for any others.
Mike: Cool. No, that’s all I have. That was my one thing I wrote down that we didn’t get to yet. And I was going to mention if we had some more time, which we did. So I’m glad that worked out. And besides that, congrats on all your success so far and for making it this far on 5 Minute Pitch. We’ll see what happens here over the next few days with what the next rounds brings and I will see you in Miami shortly.
Dawn: Oh, that’s great. Thank you so much. I’m looking forward to seeing how it all turns out too.
Mike: Cool. Thanks so much.
All right guys, that’s going to wrap up the 244th edition of the EcomCrew Podcast. As always, if you want to get to the comments for this episode, you can do so by going over to EcomCrew.com/244. That’ll get you to the show notes and the comments for this episode. And if you have a minute, please leave us a review in iTunes. It means a lot to Dave and I. It helps get exposure for the EcomCrew Podcast. All right guys, signing off from Hong Kong here where I’m in town to do Global Sources Summit and our second annual EcomCrew meetup and mastermind which has sold out again.
I’m so excited to meet a lot of people that we met last year are coming back and there’s a whole bunch of new faces coming which I’m just really excited to do. So by the time the next episode comes out after this that will have already been done. I’m excited to do an update on that and let you guys know how that went. But until the next episode, everyone, happy selling and we’ll talk to you soon.
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